A group of clients filed a lawsuit against Coinbase for facilitating the sale of unregistered securities and failing to register as a broker-dealer.
The clients claimed that Coinbase acted as an intermediary, making it the actual seller of the digital assets, and enabling it to bypass disclosure rules.
U.S. District Judge Paul Engelmayer ruled that the clients failed to demonstrate that Coinbase sold or held title to the digital assets.
Engelmayer stated that the platform had no direct role in the transactions and that its activities were insufficient to identify it as a seller.
Coinbase has denied allegations of listing securities and claimed that none of the assets listed on its platform are securities.
Coinbase's process of determining whether a digital asset is a security has been reviewed by the U.S. regulator, the SEC.
Clients of rival crypto exchange Binance have filed an appeal against a similar lawsuit that was dismissed in March 2022 by another New York judge.